EIB and KCB Bank Kenya Sign €230M Partnership to Empower SMEs, Youth, and Women

Thomas Ostros, Vice President of the European Investment Bank, highlighted the critical role of micro, small, and medium-sized businesses in Kenya’s economy.

The European Investment Bank (EIB Global) and KCB Bank Kenya have announced a significant partnership worth €230 million (KShs. 32 billion) aimed at supporting small and medium enterprises (SMEs), youth, and women in Kenya. This initiative comprises a €115 million credit line from EIB Global, matched by €115 million from KCB’s own resources.

Under the Investing in Young Businesses in Africa (IYBA) initiative, a substantial €30 million (KShs. 4.1 billion) will specifically target women-led or owned microenterprises. Additionally, €100 million (KShs. 14 billion) is allocated to enhance working capital and foster new investments in SMEs, focusing on enterprises owned or operated by women, aligning with the 2X Challenge criteria.

The remaining €100 million (KSh14 billion) will promote inclusive growth and create youth employment opportunities by supporting businesses either led by young entrepreneurs or employing at least 40% young staff. Notably, one-third of this financing is earmarked for the agriculture sector value chain, emphasizing the importance of this sector in the Kenyan economy.

Technical Support from the Gates Foundation

The Gates Foundation will provide technical assistance for this project, addressing barriers that prevent low-income women from accessing finance, such as inadequate collateral or a lack of credit history. This initiative aims to reduce the cost of loans for women by utilizing digital technology and risk-sharing mechanisms.

Thomas Ostros, Vice President of the European Investment Bank, highlighted the critical role of micro, small, and medium-sized businesses in Kenya’s economy. He noted that these businesses are particularly vulnerable to crises and often struggle with accessing affordable financing. Ostros stated, “We believe that this new partnership will help spur private sector growth, gender equality, youth empowerment, promotion of sustainable job opportunities, and reduction of poverty.”

Comprehensive Support for Startups

The financing support to KCB is part of the broader IYBA initiative, which enjoys backing from various EU Member States and their financial institutions. The initiative aims to provide not only capital for startups and early-stage businesses but also technical assistance and capacity-building to ensure that these businesses are sustainable and bankable in the long term, ultimately fostering job creation.

KCB's Commitment to SMEs and Women EntrepreneursPaul Russo, KCB Group CEO, expressed the bank's commitment to strengthening the SME sector, emphasizing the importance of tailored financial solutions, business mentorship, and capacity-building initiatives to help SMEs thrive in a competitive marketplace. He stated, “We are scaling our interventions to build a strong and vibrant SME sector to provide a solid foundation for community upliftment.”

EU’s Ongoing Support for Kenyan Enterprises

The European Union Ambassador to Kenya, H.E. Henriette Geiger, remarked on the significance of investing in businesses, particularly through the IYBA initiative, which is part of a €4 billion Global Gateway Team Europe Initiative (TEI) launched in 2021. She noted that this initiative has already supported thousands of SMEs across Sub-Saharan Africa, with €400 million identified for projects in Kenya alone.

Ambassador Geiger emphasized that the new deal between EIB and KCB represents a milestone in the EU's support for job creation through early-stage businesses and SMEs, providing Kenyan entrepreneurs with the essential resources to grow their businesses.

Additional Benefits of EIB Global Partnership

EIB Global’s collaboration with local banks like KCB provides them with favorable financial terms, including longer loan tenures. Beyond credit lines, EIB Global also offers technical assistance for capacity building, benefiting both financial intermediaries and end beneficiaries, thereby enhancing the sustainability of projects initiated through this partnership.

KCB Bank's Women-Focused InitiativesIn addition to this partnership, KCB Bank Kenya operates a women-focused initiative called Female-Led and Made Enterprises (FLME), where the bank allocates KShs. 50 billion annually to support women entrepreneurs. This initiative is part of a broader support ecosystem aimed at fostering youth and SME growth in the region.